The New Retirement: Near the Kids

Thirty-five years ago, Holly Bowers Ruben moved from California to New York, following an actor boyfriend to Brooklyn. The relationship didn’t last, but Ruben never moved back, although her mother, Marie-Louise Bowers, stayed out west.

That arrangement worked — mostly. “I did talk to my mom on a daily basis,” Ruben said. “That’s kind of the relationship we had, even when she was in California.”

But last year Bowers, 87, started having trouble getting around, and Ruben felt that helping her mother from across the country was at best a difficult prospect. In January, Ruben moved her mother to Sunrise at Mill Basin, in Brooklyn.

“Just in case she fell, I know that there’s something here, versus ‘how am I going to help her when she’s in Walnut Creek, California, and I’m in Brooklyn?'" Ruben said. “Peace of mind — that has been a huge gift.” And coincidentally, soon after Bowers moved east, Ruben had to undergo a battery of tests for what turned out to be a noncancerous brain mass, and she was comforted by having her mother nearby.

Ruben and her mother are an example of a phenomenon that is driving an increase in the construction of senior housing across the United States. More assisted living, independent living and continuing care retirement communities are being built — not necessarily in the warmer climates where seniors have traditionally retired, like Florida and Arizona, but wherever economies are robust and booming, in places like New York, Denver, Chicago and Atlanta.

It is not uncommon for today’s seniors to live well into their 80s, 90s, even past 100. And when they can no longer be entirely independent, many are moving to be near their adult children for help in the last stage of their lives.

The need for more of this kind of housing is also driven by the need to combat what many see as a growing problem of isolation among people in this older generation. Of Americans age 65 and older, 28 percent — 11 million people — live alone, according to the U.S. Census Bureau. And the National Council on Aging estimates that 8 million adults over the age of 50 are affected by isolation, which can harm both mental and physical health, said Lisa Marsh Ryerson, president of the AARP Foundation, which introduced Connect2Affect in 2016 to help raise awareness and offer solutions to senior isolation.

Ryerson said that the health effects of prolonged isolation have been found to be the equivalent of smoking 15 cigarettes a day, according to a study in Perspectives on Psychological Science. A study in the Proceedings of the National Academy of Sciences of the United States of America also found that social isolation and loneliness are associated with higher risk of mortality in adults 52 and older.

Senior living communities, where people of similar ages and abilities live together, can help combat that isolation, as can moving closer to adult children, who can then more easily help take care of their parent’s needs.

“It’s often the case that the adult child — and usually adult daughter — visits their parent and finds there’s something that’s not completely copacetic,” said Beth Burnham Mace, chief economist and director of outreach for the National Investment Center for Seniors Housing & Care. “They left the stove on, or have ambulatory needs, or trouble with meds. Something sets off an alarm bell that they need some type of assistance.”

As Ryerson pointed out, “We need meaningful connections.” When senior parents move closer to their adult children, those connections are often more frequent, and more personal. That is what drove Linda Gramatky Smith and Kendall Smith to move to the Cedar Crest Retirement Community in Pompton Plains, New Jersey. They had raised their children in Northern New Jersey, but once they became empty nesters, they moved to Westport, Connecticut, where Linda Smith had grown up and still owned her childhood home. But when their daughter, who lives in New Jersey, was widowed five years ago, they found that driving back and forth to help her with her three children was not ideal. In an uncannily prescient move, Kendall Smith, now 85, had put down a refundable deposit at Cedar Crest more than a decade ago, just in case they ever wanted to move.

Living in one of these communities, of course, is not cheap. The Smiths paid an entrance fee of about $500,000, and their monthly rent is $4,500, which is not unusual, according to the AARP. The organization estimates that entrance fees typically range from $100,000 to $1 million, and monthly rents can be from $3,000 to $5,000.

For the Smiths, however, it was worth it. Linda Smith, 75, was resistant at first about giving up their home, but she did a “total 180,” she said, soon after moving in, not just because they were closer to their daughter and grandchildren, but because it had improved their quality of life.

She has returned to painting watercolors and is on the resident advisory council, and her husband sings in the chorale.

“So many people told us come earlier than waiting and it’s true,” she said. “You just have a little more energy” to take advantage of what such a community offers.

There seems to be plenty of money behind the construction of these centers, in part because the recession did not have the same effect on senior housing that it did on the rest of the housing market.

“We were kind of a niche,” said David Freshwater, chairman of Watermark Retirement Communities, which appealed to the kinds of “people who invested in things like student housing and self-storage.”

Watermark, which is based in Tucson, Arizona, has 52 locations and is currently building or renovating an additional 10 senior housing centers, including one in a former Jehovah’s Witnesses dorm in Brooklyn Heights.

“During the recession, because it performed so well, a lot of the bigger, more institutional investors took notice and said, ‘Let’s invest some capital into the market,'” Freshwater said.

Investors don’t expect senior housing to react to the future whims of the housing market either, although occupancy rates dipped slightly, to 88.3 percent, in the first quarter of this year, from 89.2 percent in the first quarter of 2016.

Investment in senior living is seen as a “portfolio diversifier,” Mace said. “It doesn’t necessarily respond to the same business cycles as other types of real estate. It tends to be more of a need-based property type.”

The commercial real estate brokerage firm Marcus & Millichap also forecasts that the demand for senior housing is strengthening, in part because older homeowners who may have been reluctant to sell their homes when the housing market was weak are now more willing to sell and move.

“Home prices are up,” said John Chang, first vice president for research services for Marcus & Millichap. “A lot of people didn’t want to sell during the recession, so they stayed in their homes a lot longer than they may have wanted to. But now that home prices are higher again, they can sell them. They have equity built up that they can use for their next stage of life.” The new tax law, which doubled the standard deduction for most taxpayers but reduced the amount of mortgage interest that homeowners can deduct, may add another incentive for older homeowners to sell.

“The tax advantages of owning a home are maybe going away for some people,” Chang said. “And at the same time, the values are elevated. So seniors who had been aging in place now have more incentive to make a lifestyle change.”

Erickson Living, based in Catonsville, Maryland, has 20 senior properties, including Cedar Crest, and is developing seven more, said Adam E. Kane, the organization’s senior vice president for real estate acquisition and corporate affairs.

The company looks to two types of areas when deciding where to build new facilities, he said. The first is “infill markets” — places that are already densely populated, like northern New Jersey — for seniors who either want to stay in the area where they have lived or move closer to adult children.

The second is what Kane calls “growth corridor markets,” where the company sees population moving even if “there’s really not a plethora of aging demographics in the local area, but it’s a growth market where you have a lot of adult children moving to and living there.”

In 2008, for example, the company opened Ashby Ponds in Loudoun County, Virginia. When construction started, “it was not considered a densely populated area, but it attracted mostly younger families seeking to get newer homes and larger homes,” Kane said.

The facility was successful in attracting seniors from the inner Washington suburbs, he said, “either because they have family there or are looking for newer product and more value.” Erickson is currently going through the zoning process to build a similar facility in Fairfax, Virginia, for the same reason.

No matter what the economy does, Mace said, senior housing is going to be needed in the future, especially as the baby boomer generation ages. According to the Census Bureau, the percentage of the American population 65 and older will increase by 6 percent — up to 75.5 million people — by 2030.

Mace predicted that the kinds of facilities that currently exist will continue to be in demand. But there may be other kinds of housing as well, including cogenerational and even “Golden Girls"-type setups, where single older adults can choose to live together.

“We’ve seen the values of living in senior housing: socialization, hospitality, better nutrition, better exercise,” Mace said. And when it is the baby boomers’ turn, she added, they will already be familiar with the model — and ready to move in.